Jon Greenberg

With hisses and hoots, the Yale Political Union convened Tuesday night to discuss whether Yale should continue to be tax-exempt.

At the event, which was attended by roughly 70 students in Sudler Hall, Mark Schneider, vice president and institute fellow of the American Institute for Research, argued that Yale should have to pay taxes on its endowment returns. Organizations should only be exempt from taxation if the exemption allows them to promote the public good, he said, but Yale’s tax exemption created no such benefits.

“Yale’s tax exemption is not an act of God,” Schneider said. “It is an act of legislation. And it can have only one justification: to advance the public welfare.”

Earlier this year, state politicians proposed SB 413, which died in committee, but would have taxed Yale’s $25.6 billion endowment. Yale also pays a voluntary $8.2 million to New Haven each year.

But that amount is negligible compared to what Yale would have to pay under an endowment tax.

“Is it in the public interest for schools like Yale to have one-third the number of Pell students as neighboring colleges and universities have?” Schneider asked rhetorically. “Is it in the public interest when subsidies benefitting Yale students are hidden in the tax code and rarely discussed, if ever?”

Schneider’s words were met with hoots of approval from the left side of the auditorium — where Yale’s left-leaning political parties, such as the Party of the Left and Liberal Party, were seated — and hisses from the right. Students on the left appreciated that Schneider examined and analyzed the fiscal damage of Yale’s tax exemption on New Haven.

“[Schneider’s] argument was basically that by not taxing Yale, the government is subsidizing Yale students’ education at a much higher rate than it is subsidizing students at state and community colleges,” said Ariel Lowrey ’18, chair of the Liberal Party. “The money the government spends on Yale through tax expenditures from not taxing the endowment could be better spent elsewhere.”

In the question-and-answer period that followed Schneider’s lecture, students on the right side of the auditorium tried to bring the discussion around to the harm that taxing Yale would have on students and the school’s ability to continue promoting the public good. These students said during the event that an endowment tax would jeopardize Yale’s ability to conduct lifesaving research and provide jobs to New Haven.

In response, Schneider reiterated that the University could spare a piece of its $25 billion endowment and still be an outstanding university and a proponent of good in New Haven and in scientific research. He cited Oxford University, which has an endowment five times smaller than Yale’s, as proof of this statement.

Still, representatives on the right voiced other qualms with taxing Yale. Brian Cashin ’19, the floor leader of the Right of the Yale Political Union and a member of the Federalist Party, worried that taxing Yale’s endowment returns would steer the University away from its great mission of preserving and disseminating knowledge.

“Taxing Yale would condone and perpetuate the fact that Yale is being run such that its purpose to impart a values-centered education on its students has become secondary to the enlargement of its financial gains,” he said.

After the question-and-answer period, members of the audience were permitted to approach the podium and offer their opinion on the issue to those present. Zach Young ’17, a member of the William F. Buckley, Jr. Program, said on stage that Yale could not be taxed fairly given its inability to represent itself in politics.

“Yale is not allowed to politically mobilize itself to get people elected,” Young said.  “No taxation without representation.”

At 10 p.m., after about an hour of testimonies by other students and YPU members, the debate was adjourned.